Ethics Hotline & Opinions

ETHICS DOCKET NO. 1988-42

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MARYLAND STATE BAR ASSOCIATION, INC.

COMMITTEE ON ETHICS

ETHICS DOCKET NO. 1988-42

Trust Funds: Treatment of Stale Checks in Attorney’s Escrow Account

You informed us that you had an escrow account from which you mailed several checks to your client. Your client has failed to negotiate the checks and you have been informed by the bank that the checks are now ""stale"" and will be dishonored if your client tries to cash them. You feel that it is unfair that you should incur a $12 cost per check to stop payment and reissue these checks.

  In response to your inquiries, I enclose Ethics Docket 87-18 which addresses the problem of client escrow funds when the client is identified but fails to respond. In Ethics Docket 87-18, we determined that ""funds held for the credit of clients who could not be located should be maintained by the firm in a separate interest-bearing escrow account indefinitely."" But, please read the remainder of Ethics Docket 87-18, because the paragraph goes on to say that ""to the extent that this opinion conflicts with Ethics Docket 82-67, we expressly overrule that opinion.""

  I am also enclosing an Attorney General Opinion dated October 25, 1968 which addresses these issues.

  As a practical matter, I would suggest you send a letter to your client at his last known address notifying him that checks you sent him are now ""stale"" and will be dishonored.

 

 

References: Ethics Dockets 1982-67 and 1987-18


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